Iranian Coup and Global Oil Dynamics

A CIA and UK-organized coup in Iran to replace Premier Mossadeq with a pro-Western government, influenced by concerns about Mossadeq's perceived Soviet sympathies and to secure oil interests.

Organization of Petroleum Exporting Countries; an international cartel formed by oil-exporting nations to coordinate policies for fair pricing, steady supply, and a fair return on oil investments.

OPEC's reduction of oil production and price increases impacting Western economies following the Yom Kippur War.

An association of manufacturers or suppliers with the purpose of maintaining prices at a high level and restricting competition.

Political tension and conflict between the US and Soviet Union that influenced global events and strategic decisions.

Popular Iranian Prime Minister during the early 1950s. His government was overthrown in the 1953 coup.

A significant influence of industries' actions and interests impact on political and global affairs.

Low payment (royalties) for resources (oil).

A naturally occurring liquid found beneath the earth's surface, refined into fuels like gasoline and used in plastics.

A fuel formed from the remains of ancient plants and animals.

Unrefined petroleum, a mixture of hydrocarbons.

Extraction, processing, and distribution of petroleum products from source to consumer.

Companies involved in the initial stages of oil and gas production, like exploration and extraction.

Companies that process and refine crude oil into usable products like gasoline.

Companies involved in transporting and storing oil.

The amount of oil present in a reservoir that can be extracted and refined.

Potential harm caused by oil spills, pipeline leaks, and transportation accidents.

A Canadian Crown Corporation created in the 1970s to help control the Canadian oil sector.

OPEC can significantly impact oil prices by setting production targets for its member countries.

OPEC members control a large portion of the world's proven crude oil reserves, giving them significant influence over global oil supply.

OPEC sets production quotas for member countries to manage global oil production and prices.

OPEC member compliance with production quotas is mixed, as individual countries have ultimate control over their oil production.

OPEC maintains the world's entire spare crude oil production capacity, acting as a buffer against supply disruptions.

The amount of spare oil production capacity indicates the oil market's ability to respond to disruptions in oil supply.

Oil prices fluctuate due to factors like supply disruptions, geopolitical events, and weather conditions.

The short-term inelasticity of oil supply and demand contributes to price volatility.

Geopolitical events and conflicts can disrupt oil supply and lead to price increases.

Weather events like hurricanes and severe winters can disrupt oil production and distribution, impacting prices.

A benchmark price for a blend of heavy oil, bitumen, and diluents produced in Western Canada.

The theoretical price of bitumen after deducting transportation costs, including diluent and pipeline costs.

Canadian oil is of a lower quality and is located further away from refineries compared to Brent or WTI oil.

A substance added to bitumen to make it flow more easily in pipelines.

The closer oil is to refineries and customers, the lower the transportation costs and the higher the price received.

OPEC was formed to ensure fair oil prices, stable production, and a good return on investment for oil exporting nations.

OPEC's membership grew significantly in the 1960s, adding countries like Qatar, Indonesia, Libya, UAE, and Algeria.

By 1973, OPEC controlled 56% of the world's oil supply, demonstrating its growing influence on global energy.

OPEC's response to the Yom Kippur War, reducing oil production and raising prices, which shocked the world and created a shortage.

Even though OPEC had a significant share of the oil market, it wasn't a monopoly. They didn't completely control the market.

In the 1980s, countries relied on OPEC oil looked for alternatives like coal, nuclear power, and natural gas.

A global benchmark for oil prices, originating in the North Sea, reflecting its ease of transport and quality.

Another benchmark oil, produced in the US, but with limited global reach due to export restrictions and landlocked production.

The type of oil, its production location, and transportation costs all influence the price a producer receives.